[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The financial statements for Q2 2025 show increased revenue and gross margin from a new asset management agreement, but a net loss persists due to high operating expenses, while capital raising boosted equity [Consolidated Balance Sheets](index=3&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) Total assets decreased to $31.1 million, liabilities to $26.4 million, while stockholders' equity rose to $4.7 million by June 30, 2025, driven by capital raises Consolidated Balance Sheet Summary (in thousands) | Balance Sheet Item | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $4,776 | $8,087 | | **Total Assets** | **$31,134** | **$34,959** | | **Total Current Liabilities** | $13,072 | $16,090 | | **Total Liabilities** | **$26,401** | **$32,697** | | **Total Stockholders' Equity** | **$4,733** | **$2,261** | [Consolidated Statements of Operations](index=5&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Q2 2025 revenues surged to $5.7 million, yielding a $1.5 million gross margin, but net loss increased to $3.5 million due to higher G&A expenses, while H1 net loss narrowed to $5.6 million Statement of Operations Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $5,736 | $1,510 | $10,688 | $2,581 | | **Gross Margin** | $1,519 | $(215) | $2,833 | $(120) | | **Loss from Operations** | $(3,441) | $(3,216) | $(5,230) | $(5,977) | | **Net Loss** | **$(3,518)** | **$(3,204)** | **$(5,598)** | **$(5,956)** | | **Net Loss Per Share** | $(0.30) | $(0.43) | $(0.48) | $(0.81) | [Statements of Changes in Stockholders' Equity](index=6&type=section&id=STATEMENTS%20OF%20CHANGES%20IN%20STOCKHOLDERS'%20EQUITY) Stockholders' equity increased to $4.7 million by June 30, 2025, primarily due to ATM common stock issuances, option exercises, and restricted stock compensation, partially offset by net loss - Key activities impacting equity in the first six months of 2025 include the issuance of 871,828 shares of common stock for cash under the ATM program, raising approximately **$5.8 million** in gross proceeds[16](index=16&type=chunk)[17](index=17&type=chunk) - The company recorded significant non-cash compensation from restricted stock awards, totaling 1,961,898 shares in Q1 and additional compensation in Q2[16](index=16&type=chunk)[17](index=17&type=chunk) - Conversion of Series D and Series E preferred stock resulted in the issuance of 100,000 and 383,143 shares of common stock, respectively[16](index=16&type=chunk)[17](index=17&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) H1 2025 saw $7.9 million cash used in operations and $1.4 million in investing, offset by $4.5 million from financing, resulting in a $4.8 million net cash decrease Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(7,876) | $(3,941) | | Net cash used in investing activities | $(1,388) | $(889) | | Net cash provided by financing activities | $4,472 | $2,895 | | **Net decrease in cash** | **$(4,792)** | **$(1,936)** | | **Cash, end of period** | **$1,474** | **$506** | [Condensed Notes to the Consolidated Financial Statements](index=11&type=section&id=CONDENSED%20NOTES%20TO%20THE%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Notes detail accounting policies, strategic expansion into Edge Data Centers and Energy, the Asset Management Agreement, liquidity, debt, equity, segment reporting, and subsequent events [NOTE 1 – Nature of Operations and Summary of Significant Accounting Policies](index=11&type=section&id=NOTE%201%20%E2%80%93%20NATURE%20OF%20OPERATIONS%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) The company expanded into edge data centers and power generation services, notably through an Asset Management Agreement with New APR Energy, receiving a 5% equity interest in its parent - The company expanded its business in 2024 by forming Duos Edge AI to provide edge data centers and Duos Energy Corporation to offer power solutions[23](index=23&type=chunk)[24](index=24&type=chunk) - Duos entered into a two-year Asset Management Agreement (AMA) with New APR Energy, LLC to manage a fleet of mobile gas turbines. In exchange, Duos received cash and a **5% non-voting ownership interest** in New APR's parent company, Sawgrass Parent[24](index=24&type=chunk)[25](index=25&type=chunk) - The **5% interest** in Sawgrass Parent is treated as an Equity Method Investment valued at **$7.2 million**, which was recorded as non-cash consideration for future services under the AMA[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) [NOTE 2 – Liquidity](index=24&type=section&id=NOTE%202%20%E2%80%93%20LIQUIDITY) Despite a $5.6 million net loss and $8.3 million working capital deficit, management asserts no going concern doubt due to successful capital raises and anticipated cash flow from the Asset Management Agreement - For the six months ended June 30, 2025, the company had a net loss of **$5,597,694** and a working capital deficit of **$8,296,491**[109](index=109&type=chunk) - The company has actively raised capital, including proceeds from its At-The-Market (ATM) offering program in 2024 and 2025[110](index=110&type=chunk) - Subsequent to the quarter's end, the company priced a public offering with net proceeds of approximately **$37.1 million**, which is expected to bolster its balance sheet[110](index=110&type=chunk) [NOTE 7 – Debt](index=28&type=section&id=NOTE%207%20%E2%80%93%20DEBT) Total debt as of June 30, 2025, includes $1.1 million in related-party secured promissory notes, with $1.0 million repaid in H1 2025 Notes Payable, Related Parties (net) | Date | Amount | | :--- | :--- | | June 30, 2025 | $1,085,139 | | December 31, 2024 | $1,758,396 | - The company made early payments of **$1,000,000** on the related-party notes during the six months ended June 30, 2025[140](index=140&type=chunk) [NOTE 9 – Stockholders' Equity](index=32&type=section&id=NOTE%209%20%E2%80%93%20STOCKHOLDERS'%20EQUITY) This note details H1 2025 common stock issuances via ATM, services, ESPP, option exercises, preferred stock conversions, and restricted stock grants to the executive team - In H1 2025, the company issued **871,828 shares** of common stock through its ATM program for gross proceeds of **$5,790,814**[180](index=180&type=chunk)[190](index=190&type=chunk) - On January 1, 2025, **1,841,898 shares** of restricted stock with a three-year cliff vest were granted to the executive leadership team[178](index=178&type=chunk) - During H1 2025, **300 shares** of Series D Preferred Stock were converted into **100,000 common shares**, and **1,000 shares** of Series E Preferred Stock were converted into **383,143 common shares**[158](index=158&type=chunk)[170](index=170&type=chunk) [NOTE 11 – Segment Reporting](index=48&type=section&id=NOTE%2011%20%E2%80%93%20SEGMENT%20REPORTING) Effective January 1, 2025, the company operates in three segments, with Asset Management being the largest revenue contributor ($8.7 million) and only profitable segment in H1 2025 Segment Performance - Six Months Ended June 30, 2025 (in thousands) | Segment | Net Revenues | Income (Loss) from Operations | | :--- | :--- | :--- | | Technologies | $2,005 | $(5,369) | | Data Center Hosting & Related Services | $8 | $(833) | | Asset Management Services | $8,675 | $3,041 | | Corporate and Unallocated | $— | $(2,069) | | **Consolidated** | **$10,688** | **$(5,230)** | [NOTE 15 – Subsequent Events](index=52&type=section&id=NOTE%2015%20%E2%80%93%20SUBSEQUENT%20EVENTS) Post-quarter, the company raised $37.1 million net from a public offering, repaid related-party debt, and terminated its ATM agreement - On July 30, 2025, the company priced a public offering of common stock for net proceeds of approximately **$37.1 million**, which closed on August 1, 2025[258](index=258&type=chunk) - On August 6, 2025, the company fully repaid the outstanding principal and interest of **$1,388,356** on its notes with 21 April Fund LP and 21 April Fund Ltd[259](index=259&type=chunk) - The At-The-Market (ATM) Issuance Sales Agreement was terminated on August 13, 2025, after raising total gross proceeds of **$12,472,036** under the program[260](index=260&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=53&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strategic diversification into Edge Data Centers and Power Generation, significant revenue growth from the Asset Management Agreement, increased operating expenses, and improved liquidity from recent capital raises [Overview and Plan of Operation](index=54&type=section&id=Overview) The company is strategically diversifying beyond its RIP product into high-growth markets via new subsidiaries, Duos Edge AI for Edge Data Centers and Duos Energy for power generation - The company's growth strategy involves expanding its technology base through organic development, partnerships, and potential acquisitions[266](index=266&type=chunk) - Strategic expansion in 2024 led to the creation of Duos Edge AI for Edge Data Centers and Duos Energy Corporation for power generation services[268](index=268&type=chunk)[269](index=269&type=chunk) [Results of Operations](index=56&type=section&id=Results%20of%20Operations) Q2 2025 revenue surged 280% to $5.7 million, driven by the AMA, resulting in a $1.5 million gross margin, but G&A expenses led to a $3.5 million net loss, while H1 net loss narrowed Q2 2025 vs Q2 2024 Revenue (in thousands) | Revenue Source | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Technology systems | $41 | $265 | -84% | | Services and consulting | $5,687 | $1,245 | 357% | | Hosting | $8 | $0 | 100% | | **Total revenues** | **$5,736** | **$1,511** | **280%** | - The significant increase in services revenue in Q2 2025 was primarily driven by the new Asset Management Agreement (AMA) with New APR, which generated **$3.9 million** in direct revenue and **$0.9 million** from amortization of deferred revenue[279](index=279&type=chunk) - Gross margin for Q2 2025 improved to **$1.5 million** from a loss of **$0.2 million** in Q2 2024, largely due to high-margin revenue from the AMA[284](index=284&type=chunk) - The net loss for H1 2025 decreased by **6%** to **$5.6 million** from **$6.0 million** in H1 2024, while net loss per share improved to **$0.48** from **$0.81**[301](index=301&type=chunk) [Liquidity and Capital Resources](index=62&type=section&id=Liquidity%20and%20Capital%20Resources) Despite an $8.3 million working capital deficit and negative operating cash flow, recent capital raises, including a $37.1 million public offering, ensure sufficient liquidity for the next twelve months Cash Flow Summary - H1 2025 vs H1 2024 (in thousands) | Cash Flow Activity | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(7,876) | $(3,941) | | Net cash used in investing activities | $(1,388) | $(889) | | Net cash provided by financing activities | $4,472 | $2,895 | - The company successfully raised capital through its ATM program and a public offering that closed on August 1, 2025, with net proceeds of approximately **$37.1 million**[311](index=311&type=chunk) - Management has determined that despite historical losses and a working capital deficit, there is no substantial doubt about the company's ability to continue as a going concern for at least twelve months from the report's issuance date[313](index=313&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=68&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This item is not applicable to the company as a smaller reporting company - Not applicable[340](index=340&type=chunk) [Controls and Procedures](index=69&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2025, disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of the end of the period, the company's disclosure controls and procedures were effective[341](index=341&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025[342](index=342&type=chunk) [PART II – OTHER INFORMATION](index=70&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=70&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any litigation expected to materially adversely affect its financial condition or results of operations - The company reports no pending or threatened legal proceedings that could have a material adverse effect[345](index=345&type=chunk) [Risk Factors](index=70&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes from the risk factors disclosed in the Annual Report on Form 10-K filed on March 31, 2025[346](index=346&type=chunk) [Other Information](index=70&type=section&id=Item%205.%20Other%20Information) On August 13, 2025, the company terminated its ATM Issuance Sales Agreement, having raised $12,472,036 in gross proceeds with no termination penalties - The At-The-Market (ATM) Sales Agreement was terminated effective August 13, 2025[349](index=349&type=chunk) - Total gross proceeds raised under the ATM agreement amounted to **$12,472,036**[349](index=349&type=chunk) [Exhibits](index=71&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and Inline XBRL data files

Core Insights - Duos Technologies Group, Inc. reported a 280% increase in quarterly revenue, reaching $5.74 million in Q2 2025 compared to $1.51 million in Q2 2024, driven by strong performance in energy services and edge computing [4][20] - The company is on track to meet its full-year revenue guidance of $28 million to $30 million, representing a projected increase of 285% to 312% from 2024 [20][21] - The gross margin for Q2 2025 improved significantly, increasing 808% to $1.52 million from a loss of $0.21 million in Q2 2024, primarily due to the execution of the Asset Management Agreement (AMA) with New APR Energy [7][15] Financial Performance - Total revenue for the first six months of 2025 increased 314% to $10.69 million from $2.58 million in the same period last year [12][13] - Services and consulting revenue accounted for approximately $10.59 million, with significant contributions from the AMA [13][14] - Cost of revenues increased 191% to $7.86 million, primarily due to the support of the AMA [14] Operational Highlights - The company showcased its first production standalone Edge Data Center (EDC) and began installation activities at three additional locations [4][19] - As of the end of Q2 2025, Duos had a revenue backlog of approximately $40.7 million, with $18 million expected to be recognized in 2025 [19][20] - Duos completed a $40 million public offering and raised an additional $12.5 million through an At-the-Market offering, enhancing its cash position for future expansions [4][20] Management Commentary - The CEO expressed confidence in the company's growth trajectory, highlighting the record revenues achieved in the first half of 2025 and the expectation of reaching breakeven in the near future [21]

Group 1 - The company is experiencing a promising moment due to a new contract with APR Energy, leading to an increase in both revenue and margins [1] - The recommendation is to buy the stock based on its current performance and potential [1] Group 2 - The analysis approach includes triangulation between valuation by multiples, discounted cash flow (DCF), and Dividend Yield [2] - Focus is on Consumer Discretionary and Consumer Staples sectors, prioritizing smaller capitalization companies with low institutional coverage for greater potential [2] - The investment philosophy combines income and value investing strategies, emphasizing the importance of a margin of safety in multiples and projected cash flow [2]

Core Insights - Duos Technologies Group, Inc. expands its partnership with FiberLight, LLC to enhance the deployment of Edge Data Centers (EDCs) and improve high-speed connectivity in underserved U.S. markets [1][3][5] Group 1: Partnership and Deployment - The partnership aims to accelerate the deployment of modular, SOC 2 Type II compliant EDCs, focusing on rapid delivery, energy efficiency, and high availability [3][4] - FiberLight's extensive fiber network, covering approximately 75 route miles in Corpus Christi and over 13,000 route miles across Texas, supports this initiative by providing fast and reliable access to next-generation infrastructure [3][4] - The collaboration is designed to enhance service delivery for sectors such as education, healthcare, and AI-driven applications in both urban and rural communities [3][4] Group 2: Project Implementation - A recent project in Corpus Christi demonstrated the partnership's effectiveness, where Duos Edge AI provided a cost-effective solution to quickly reestablish FiberLight's primary point-of-presence (POP) [4][5] - The expedited permitting and installation process allowed for the deployment of a new EDC just 30 feet from existing infrastructure, saving over 2,000 feet of new construction and minimizing downtime for local customers [4][5] Group 3: Future Plans - Duos Edge AI is on track to contract 15 EDCs by the end of 2025, with active deployments in Texas and plans for expansion into the Midwest and Southeastern U.S. [5][6] - The expanded partnership facilitates joint planning for site selection, connectivity, and turnkey deployment in markets where infrastructure is critically needed [6]

Core Points - Duos Technologies Group, Inc. will hold a conference call on August 14, 2025, at 4:30 p.m. Eastern time to discuss its financial results for Q2 2025 [1][2] - The financial results will be released via press release prior to the call [1] - The conference call will include a question-and-answer session hosted by Duos management [1] Company Overview - Duos Technologies Group, Inc. is based in Jacksonville, Florida, and operates through its subsidiaries, focusing on intelligent technology solutions for Machine Vision and AI applications [5] - The company's offerings include real-time analysis of fast-moving vehicles, Edge Data Centers, and power consulting [5]

Core Insights - Duos Technologies Group, Inc. through its subsidiary Duos Edge AI is advancing edge computing solutions to enhance K-12 education, healthcare access, and community connectivity in Texas [1][4] - The company hosted staff from Congressman Ronny Jackson's office to showcase its Edge Data Center (EDC) in Amarillo, Texas, highlighting its role in local data processing and real-time data capabilities [1][3] - Duos Edge AI aims to expand its services from the Amarillo hub to other communities, focusing on delivering high-speed data services to support education, telehealth, and economic growth in rural areas [3][4] Company Overview - Duos Edge AI specializes in adaptive Edge Data Center solutions designed to meet the evolving needs of various environments, particularly underserved communities [5] - The company provides high-powered edge computing solutions that minimize latency and optimize performance, with capabilities of over 100 kW per cabinet and rapid deployment within 90 days [5] - Duos Edge AI's mission includes enhancing technology access in education and healthcare sectors, particularly in rural industries [5] Educational Impact - The partnership with Region 16 Education Service Center is seen as transformative for rural school districts, enabling real-time data processing and local AI capabilities [4] - The initiative is recognized for its potential to bridge the digital divide and improve technology access and workforce development in Tier 3 and Tier 4 markets [4] Regional Context - Region 16 Education Service Center serves 60 school districts and three charter schools across a 26,000 square mile area, with an average daily attendance of over 83,000 students [6] - The collaboration aims to enhance educational infrastructure and community connectivity through advanced technology solutions [4][6]

Core Viewpoint - Duos Technologies Group, Inc. has successfully completed an upsized and oversubscribed public offering, raising capital to support its Edge Data Center business and fulfill a $50 million revenue pipeline [1][3][4]. Group 1: Offering Details - The company priced its public offering at $6.00 per share, totaling 6,666,667 shares, with an additional option for underwriters to purchase up to 838,851 shares [1][3]. - The offering is expected to close on or about August 1, 2025, subject to customary closing conditions [4]. Group 2: Financial Position and Use of Proceeds - With over $40 million in expected cash on hand, Duos is fully capitalized to advance the deployment of 65 additional Edge Data Centers [2][3]. - The net proceeds from the offering will be utilized to expand, accelerate, and further commercialize the company's Edge Data Center business [3]. Group 3: Investor Participation - The offering saw primary participation from fundamental institutional investors, including a leading long-only mutual fund and several prominent global investment managers [2][4].

Core Points - Duos Technologies Group, Inc. is initiating an underwritten public offering of its common stock to support the expansion and commercialization of its Edge Data Center business [1][2] - The net proceeds from the offering will be utilized to capitalize on a substantial backlog and advance to Stage 2 of the company's Edge Data Center strategy, which involves the development and deployment of over 65 edge data centers [2] - Titan Partners Group is acting as the sole bookrunner for the offering, which is being conducted under a shelf registration statement filed with the SEC [2] Company Overview - Duos Technologies Group, Inc. is based in Jacksonville, Florida, and operates through subsidiaries that focus on intelligent technology solutions for Machine Vision and AI applications, including Edge Data Centers [4]

Core Insights - Noodles & Company is launching a new menu item called Delicious Duos, which combines a small entrée with a protein and a side, starting at $9.95, aimed at providing value and variety for customers [1][2][4] Group 1: Product Offering - Delicious Duos allows customers to mix and match popular dishes such as Rigatoni Rosa with Parmesan Chicken and Pulled Pork BBQ Mac & Cheese, enhancing meal customization [3] - The sides included in Delicious Duos are designed to complement the main entrée, with options like Lemon Parmesan Broccoli, Small Caesar Salad, Small Garden Salad, and Cup of Chicken Noodle Soup [9] Group 2: Customer Insights - A survey by Pollfish indicates that nearly 50% of respondents prefer a small entrée with a side, and over 75% prioritize price and value when dining out, which aligns with the offering of Delicious Duos [2][10] - The new menu item is positioned to cater to various dining occasions, whether for lunch or dinner, providing perfectly portioned meals that fit into customers' daily routines [4] Group 3: Marketing and Promotions - To celebrate the launch of Delicious Duos, Noodles & Company is hosting a "Dress as a Duo Day" on August 16, offering a Buy One, Get One 50% Off promotion for customers who participate [5][6] - The company encourages social media engagement by inviting customers to share their Duo-inspired looks for a chance to win a gift card [6] Group 4: Loyalty Program - Noodles Rewards program offers customers additional benefits, including points for every dollar spent, exclusive offers, and a free entrée after a first purchase of $10 or more [7] Group 5: Company Background - Noodles & Company has been in operation since 1995, focusing on a diverse menu that includes noodles, soups, salads, and sides, with over 460 locations [8][10] - The company has received multiple accolades, including recognition for its loyalty program and workplace diversity, highlighting its commitment to quality and customer satisfaction [8][10]

Core Insights - Duos Technologies Group, Inc. is expanding its Edge Data Center (EDC) infrastructure with the deployment of two new EDCs in Corpus Christi, Texas, aimed at enhancing carrier access and supporting local markets [1][3][4] - The Corpus Christi project is part of Duos Edge AI's broader strategy to deploy 15 EDCs nationwide by 2025, focusing on underserved and high-growth markets [4][6] - The new EDCs will serve as central communication hubs for various sectors, including mobile operators, enterprises, education, and healthcare, thereby driving local economic growth [1][3] Company Strategy - Duos Edge AI emphasizes rapid execution and scalability in deploying next-generation edge infrastructure, which is crucial for meeting increasing demand for localized computing power [3][4] - The company aims to bridge the digital divide by providing high-powered edge computing solutions that minimize latency and optimize performance, particularly in underserved communities [5][6] - The modular design and rapid 90-day deployment capability of the EDCs allow for efficient scaling and integration with existing infrastructure [4][5] Market Impact - The deployment of EDCs in Corpus Christi is expected to enhance service readiness for regional partners and remove barriers to edge connectivity [3][4] - By positioning EDCs within 12 miles of end users, Duos Edge AI aims to significantly improve data processing capabilities for applications requiring real-time responses [5][6] - The initiative is aligned with the growing demand for high-speed computing solutions in various sectors, supporting the digital economy and local development [1][3]